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The Annotated Opus Dei Goldman Squid
Some have taken the high road and present a point by point rebuttal (also here) of Goldman's "come to god" epistle. We think that is unnecessary: everybody with 3 neurons and an axon between them can read between the lines of this fake attempt by the squid to avoid acknowledging any blame for anything that may have happened in the past decade, and provide justification for why Goldman is a worthy recipient of billions in taxpayer money even thought it never needed it... Oh and also how Goldman doesn't front run anyone (not even those who are its clients and sign off a permissive waiver or are embedded within the Matrix itself courtesy of the Redi product suite). After all it is thanks to them that the world as we know it exists (as broke as it may be). We'll reserve judgment on that until the next unprecedented market crash, at which point the general public will be far less concerned with AIG bonuses, as with the behavior of those at 200 West (f/k/a 85 Broad). At that point Goldman will have a much better opportunity to reach the people of Main Street, for whom shockingly the recession is far from over, and who have yet to find a way to borrow low and lend high, without breaking all sorts of usury laws. Instead, we present a slightly more humorous take on Goldman's letter, courtesy of William Banzai.
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Mmmmm...I love the smell of fried calamari in the morning...
I think Goldman just got burned!
ROFL. I love the format as well. Just write the truth on top of the crap. Easy to locate the bs then for the lay reader. All they have to do is read below the caption.
I may have missed the memo but did Goldman ever pay off those FDIC subsidized TLGP bonds? You know, the ones that Blankfein wished he had never done in the first place?
Loved it!!!!!!!!!! Ah, truthful summary.
Here's my haiku -
Government no backstop banks
Citizens no backstop government
Don't forget the laugh track that goes with it:
http://www.youtube.com/watch?v=osg3pjN3Kf8&feature=player_embedded
lloyd. you bald bonehead. you are the laughing stock of the world. long live the internet.
It is amazing they forget to mention that their alums are the Fed and the Treasury, and their bought and paid for puppet is in the White House, I would think that would give folks a bit more confidence in the Madoff Squid Mania that is so obviously God's Work!
I remember the day in 2006 that I called Goldman to ask them the best way to short structured credit. They asked me "why would you guys want to do that?" Goldman subsequently reversed course, and went short credit and made piles of money. I got fired for warning senior managers about the credit bubble, CDS, CDOs, and commercial real estate. In the end, I was right but they fucked me real good. Who cares, I couldn't stand the arrogant, lying hypocrites.
very funny/sad read, and I plan to use your three neurons and an axon reference...
We have a long history of helping states and municipalities
access the capital markets. Since entering the public finance
business in 1951, Goldman Sachs has been one of the most
significant industry participants and over the past decade
has helped states and municipalities raise over $250 billion
in capital. In 2009, we were the number one underwriter
for the Build America Bond program, which allows states and
municipalities to meet their borrowing needs and invest in
infrastructure projects. We also helped finance over $28 billion
for nonprofit institutions including education services, healthcare
and government entities.
Page (4)
Source: Thomson Financial
The ten largest underwriters for U.S. long-term municipal new issuance in 2003 were financial services companies that operate globally. Except for UBS AG, which is a Swiss public company, and RBC Dain Rauscher, which is wholly owned by the Royal Bank of Canada, all the others are publicly traded U.S. companies.
The companies are competitors in most of their business segments, including investment banking, which usually handles the underwriting business.
While the volume of municipal bonds issued has soared in recent years (particularly revenue bonds backed by state appropriations), they have not been without controversies. There are numerous examples of citizens challenging the constitutionality of such debt.
CURRENT LEGAL PROCEEDINGS
All of these companies, except UBS and the Royal Bank of Canada, disclose numerous legal proceedings against them in their most recent 10-Ks filed with the U.S. Securities and Exchange Commission (SEC). The number of cases reported by UBS and the Royal Bank of Canada in their equivalent SEC filings for foreign companies (20-Fs and 40-Fs) is small by comparison.
The U.S. companies have been accused of violating state and federal laws and rules pertaining to the same issues in a number of cases. For example, except for Morgan Stanley, all seven U.S. companies have been named as defendants in the Enron case. A majority of the U.S. companies are defendants in the WorldCom case. In May 2004 Citigroup agreed to pay $2.65 billion to settle investor lawsuits related to WorldCom.
Other recent high profile cases in which one or more of the leading underwriters are involved in litigation include Global Crossing, Adelphi Communications, Dynegy and Parmalat. A number of the companies have been embroiled in the mutual funds scandal.
In many cases, the companies have settled without admitting wrongdoing, which is a common practice. Some of the cases are still ongoing.
All the U.S. companies have been accused of conflict of interest related to research, failure to disclose such matters and IPO (initial public offering) allocation practices. Broadly, the allegations against the companies involve violation of various state and federal securities laws and state unfair competition statutes, breach of fiduciary duty, and conspiracy (e.g., conspiring to inflate prices of securities and conspiring to fix the fee paid to initial public offerings of securities in violation of antitrust laws), among other matters.
MUNICIPAL BANKRUPTCIES, FRAUD AND OTHER LITIGATION
Orange County: Merrill Lynch and Other Securities Firms
In the Orange County bankruptcy case, the largest municipal bankruptcy in U.S. history, 14 firms, including 5 leading Wall Street investment houses were sued by bondholders in 1995. In addition to settling with bondholders, in June 1998, Merrill Lynch agreed to pay Orange County $400 million to settle civil charges.1 The company also paid $30 million to end a criminal investigation against its investment dealings with Orange County.2
State of California and Goldman Sachs
In November 1995, the State of California filed a lawsuit against Goldman seeking $586 million in damages from the securities firm for failing to disclose that it represented both buyer and seller in the sale of two hospitals. The suit accused Goldman of breach of fiduciary duty and violating the state's Fair Political Practice Act.
Triad Healthcare Corp., which bought two Los-Angeles based hospitals from Nu-Med Inc., had been specifically created by Nu-Med to buy the two private hospitals. The lawsuit alleged that Goldman hid the fact that it represented both Triad and Nu-Med in a deal that involved the sale of $142 million of taxable notes that a decade later were refinanced with $167 million in certificates of participation. Triad later defaulted on the certificates of participation, which were backed by state insurance. The state was forced to pay debt service after the default, leading to investigations that revealed Goldman's role in the deal.
The lawsuit charged that Goldman created the illusion of an arm's length transaction with an independent public benefit corporation (the issuer of the certificates) and also negotiated a price that was preset. The state was eventually paid $31 million by Goldman. The company also agreed to pay $20 million more if the state did not receive payments from other parties involved in the case.4
Political Contributions: Merrill Lynch and Other Securities Firms
Other high profile issues that have been the subject of investigations in relation to the municipal bond business include political contributions made by underwriting firms.
In the 1990s, a flurry of investigations were initiated across the country, which were partly triggered by the New Jersey Turnpike Authority scandal, in which underwriters allegedly used political contributions to get bond business from the administration of Governor Jim Florio. The investigation focused on whether Merrill Lynch, a senior manager in the syndicate, had steered business to a local firm to win two of the largest Turnpike refunding deals. After Merrill Lynch found irregularities in the account, it placed three senior officials on administrative leave. Florio's chief of staff, Joseph P. Salema, pleaded guilty to a criminal charge of securities fraud in the wake of the investigations.7
Around the same time, the Securities and Exchange Commission also reprimanded the National Association of Securities Dealers for lax enforcement of the Municipal Securities Rulemaking Board's Rule G-37, which was intended to deter pay-to-play practices in the municipal bond market.
Denver International Airport Bondholder Lawsuit
In 1997 five underwriting firms - Lehman Brothers, Goldman Sachs, Dain Bosworth, Piper Jaffray and Lazard Freres - agreed to to settle four class action lawsuits that had been brought by holders of $4.9 billion in bonds issued for Denver International Airport. The plaintiffs had charged that the defendants knew about but failed to disclose construction problems that led to cost overrruns and an 18-month delay in opening. The settlement, the amount of which was not disclosed, came after the U.S. Supreme Court rejected arguments that municipal issuers should be shielded from being sued under federal law.9
NOTES1. Michael B. Marois, "Merrill Lynch Agrees to Pay Orange County $400 Million," The Bond Buyer, June 3, 1998.
2. Leslie Berkman and Arleen Jacobius, "Merrill Lynch Ends Probe with Payment of $30 Million," The Bond Buyer, June 20, 1997.
3. Bloomberg News, "Bank of America Settles Suits from California," New York Times, November 13, 1998.
4. Joe Bel Bruno, "Goldman Accused of Playing Both Sides in Hospital Deal," The Bond Buyer, January 16, 1996.
5. John E. Morris, " King Coal," Daily Deal/The Deal, March 29, 2004.
6. Jerry Reynolds, "Navajo Win Another Court Round Against Energy Giant Peabody Coal," InDain Country Today, May 5, 2004.
7. Patrick M. Fitzgibbons and Joyce Hanson, "Merrill Steps Up Against Wall Street to Bid for Giant N.J. Transit Issue," The Bond Buyer, July 19, 1995.
8. Patrick M. Fitzgibbons and Lynn Stevens Hume, "Ferber Indicted; Lazard, Merrill Will Pay $24 Million," The Bond Buyer, October 27, 1995.
9. Darrell Preston, "Four Denver Airport Suits Settled by Investors, Firms," The Bond Buyer, March 23, 1997.
http://www.publicbonds.org/major_players/underover.htm
Roses are Red,
Violets are Blue,
Goldman is Innocent,
And Greenspan is, Too.
It's amazing to think they can influence opinion coming out with rubbish like this (i.e. without the 'overprint'!) when the better course of action would be to do nothing.
DavidC
GS arrogance knows no bounds
No picture of Obama shinning Lloyd's shoes?
TWO BANKERS/SQUIDS: http://williambanzai7.blogspot.com/2010/04/two-bankerssquids.html
that's good stuff banzai
love the references available upon request from hank G. bit.
we need to make a t-shirt up with the AIG toxic waste sign.
Thanks for the repost TD, thanks for the feedback all, thanks ZH...great blog, great source of information and entertainment!
WB7
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